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Kell & Rigby Pty Ltd v Flurrie Pty Ltd

Kell & Rigby Pty Ltd v Flurrie Pty Ltd

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Case Copied 6 September 2006 50 min read

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Reported Decision:
67 NSWLR 113

New South Wales

Supreme Court

CITATION: Kell & Rigby Pty Ltd v Flurrie Pty Ltd [2006] NSWSC 906

HEARING DATE(S): 22 August 2006

JUDGMENT DATE :
6 September 2006

JURISDICTION: Equity

JUDGMENT OF: Brereton J

DECISION: 1. Order that the summons be dismissed, with costs.; 2. Order that the plaintiff forthwith withdraw caveat AB140199. ; 3. Direct that the defendant have liberty to apply, at its own risk as to costs, by arrangement with my associate within seven days, for an inquiry as to damages under the usual undertaking.

CATCHWORDS: REAL PROPERTY – Land under Torrens Title – Caveats – BUILDING AND ENGINEERING CONTRACTS – Residential Building Contracts – in what circumstances can residential building contract create caveatable interest - Home Building Act 1989, s 7D – whether s 7D(3)(c) defines terms of permissible charge or event precedent to enforceability – whether judgments obtained by registration of adjudication certificates under Building and Construction Industry Security of Payment Act are judgments that payments of moneys due under the contract be made within s 7D(3)(c) – whether caveatable interest can be created by estoppel when creation by contract prohibited.

LEGISLATION CITED: Building and Construction Industry Security of Payment Act 1999 (NSW), ss 3, 8, 9, 11, 16, 32
Building Services Corporation Legislation Amendment Act 1996 (NSW)
Commercial Arbitration Act 1984 (NSW)
Corporations Law (Cth), s 562A
Home Building Act 1989 (NSW), ss 7D(1), (2), (3), 95(4)
Home Building Amendment Act 1998 (NSW)
Home Building Amendment Bill 1998 (NSW)
Law Reform (Miscellaneous Provisions) Act 1946 (NSW), s 6

CASES CITED: Brodyn Pty Ltd t/as Time Cost and Quality v Davenport (2004) 61 NSWLR 421
Brooks v Burns Philp Trustee Co Ltd (1969) 121 CLR 432
Butterell v The Douglas Group Pty Ltd (2000) 35 ACSR 398; [2000] NSWSC 942
Chan v Cresdon (1989) 168 CLR 242
Falgat Constructions Pty Ltd v Equity Australia Corporation Pty Ltd [2005] NSWCA 49
Griffith v Hodge (1979) 2 BPR 9474
Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641, 674
Kok Hoong v Leong Cheong Kweng Mines Ltd [1964] AC 993
Lieberman v Morris (1944) 69 CLR 69
National Acceptance Corporation Pty Ltd v Benson (1988) 12 NSWLR 213
Okaroo Pty Limited v Vos Construction and Joinery Pty Limited [2005] NSWSC 45
Overmyer Industrial Brokers Pty Ltd v Campbells Cash & Carry Pty Ltd [2003] NSWCA 305
Sanpine v Koompahtoo Local Aboriginal Land Council [2005] NSWSC 365
Smith v Smith (1986) 161 CLR 217
Thomas Hughes Homes Pty Ltd v Newland [1999] NSWSC 894
Waltons Stores (Interstate) Pty Ltd v Maher (1988) 164 CLR 387

PARTIES: Kell & Rigby Pty Ltd ABN 20 001 766 454 (P)
Flurrie Pty Ltd ABN 34 098 877 920 (D)

FILE NUMBER(S): SC 01993/2006

COUNSEL: Mr M Ashhurst (P)
Mr A J McInerney (D)

SOLICITORS: Thomson Playford Lawyers (P)
Gadens Lawyers (D)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
EXPEDITION LIST

BRERETON J

6 September 2006

1993/2006…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2006] NSWSC 906
Decision Date: 6 September 2006

CaseChat Overview and Summary

The parties involved in this case were Kell & Rigby Pty Ltd, the respondent, and Flurrie Pty Ltd, the appellant. The dispute centred around a caveat entered by Kell & Rigby over Flurrie's property to secure payment under a residential building contract. The High Court of Australia was tasked with determining the legality of this action. The central legal issues revolved around whether a residential building contract could create a caveatable interest under the Torrens Title system and, if so, under what conditions. Specifically, the court needed to decide whether section 7D(3)(c) of the Home Building Act 1989 defined the terms of a permissible charge or event precedent to enforceability. Additionally, the court examined whether judgments obtained by registering adjudication certificates under the Building and Construction Industry Security of Payment Act constituted judgments that required payments of moneys due under the contract to be made within the specified timeframe. Finally, the court considered whether a caveatable interest could be created by estoppel when the creation of such an interest by contract was prohibited.

The court's reasoning focused on the statutory provisions governing the creation of caveatable interests and the principles of estoppel. The High Court concluded that section 7D(3)(c) did not permit a charge or event precedent that would allow a party to secure payment by entering a caveat. The court found that judgments obtained by registering adjudication certificates were not judgments within the meaning of section 7D(3)(c) and therefore did not provide a basis for a caveatable interest. Furthermore, the court held that an estoppel could not create a caveatable interest where the creation of such an interest by contract was prohibited. The decision underscored the importance of adhering to statutory requirements and the limitations of equitable estoppel in creating security interests over Torrens Title land.

In light of these findings, the court determined that the caveat entered by Kell & Rigby was invalid and ordered its removal. The High Court's decision reinforced the need for clarity in statutory language and the adherence to legislative intent in creating security interests over Torrens Title property. This case serves as a reminder to parties involved in residential building contracts to carefully consider the legal mechanisms available for securing payments and the limitations imposed by statute.

Orders